All Forum Posts by: Thomas Gagnon

@Steven Hamilton II

Funny you mention the IRC 469 code, I recently discussed if any cons exist with electing to combine properties with my CPA because I purchased additional properties last year and their answer was, not really?!?  No mention of the cons you cited above, thanks for the info Steve!

Thanks for the answers.  As you can probably tell  I'm in the middle of an audit as we speak.  My records are impeccable, "at the risk jinxing myself", they are not being contested as of yet.  However, in the first response back from the IRS they stated in an email that they made it partially through my mileage and activity/time log and determined that the time spent driving to and from the property from my home/home office is not time that can be considered.  This is my first property and over the course of roughly a year and a half I was there almost every day fixing/managing the property into a shiny diamond.  I worked roughly 2000 hours in my consulting gig and another 2400 on real estate in 2015.  The total drive time not being allowed was not even disclosed to me.  The Auditor simply stated "I made it to August in your log and factoring in roughly an hour there and an hour back each time, you fail the 50% test".  No consideration was given to if I stopped in the middle to get supplies or tools or to meet with another party, though all were documented in great detail.  On a daily basis I would compile my logs using a combination of voice memos on my phone, EZpass, time stamps from store receipts and a device called mileage ace installed in my vehicle.  The auditors contention is that they are considering the time to and from as commuting.  I'm looking for additional experience from anyone that may have been through this before and a successful defense against considering this time as commuting?  P.S.  I know after speaking to many that the hours seem high, but no kids, no wife, just truck and tools and a tenacity for succeeding at this.  None of my times are estimates and are backed by the third party sources I noted.  Just a crazy weirdo trying to switch gigs......

Thanks Everyone!!

@brandon hall

@amanda Han 

Im reaching out to all the real estate tax attorneys lawyers CPA etc. I want to start by saying that I have contacted both tax attorneys and CPAs in my local area and have not made much progress after those meetings, so please refrain from that suggestion. I'm looking for actual experience with the following issue. I have been reading a lot about the real estate professional tests. My question is geared towards whether the time spent going to and from or at the very least to my rental properties can count towards the hours needed to establish my real estate professional status? I can find countless case law in support of this but they all vary somewhat with respect to the details of each case I find. In some, travel time TO AND FROM was allowed, in others it was not. Most if not all cases where it was not allowed the tax payer did not keep day to day records or their records were lacking some substantial level of detail. I have no issue with the contemporaneous nature of my records or the level of detail contained in them. In interpreting the IRS tax code it states that travel time is not considered material participation but in other IRS guidance docs they state that they have no real definition of what constitutes travel etc. In other IRS publications travel mileage is allowed as a deduction, that said, if mileage is deductible because it is a business expense then it is logical to believe the time spent in that activity constitutes a business activity and as such you'd think it would count towards material participation. In my case my LLCs are registered to my home address where my home office is located, which I believe establishes that my tax home is then my home address. In my case I did not file for a home office because of the hassles that may ensue, however that is not being scrutinized, at least not yet. However, all legal docs, utility bills, business banking statements, leases you name it list my home address on them. I'm constantly transporting materials, tools, to my properties so I can complete repairs etc. I also conduct all one on one tenant meetings, transactions, almost all meetings with anyone related to my business activities at either the property or my home office. I do not use property management or any other service provider outside of those required to be licensed in my real estate rental business. I am the definition of self management. I do have other income in the form of Engineering consulting that I do on a regular basis and I am paid hourly to do it, billing for for each hour spent in that activity, with sound records for that as well. I'm looking for a sound defense that travel time if spent traveling to a rental property activity at the very least can count towards the hours. I could attempt to be more aggressive and also count hours traveling from that completed business activity back to my home office whether or not additional business activities are accomplished once I arrive but I'll leave that out of my question here. Any help from a tax attorney lawyer or CPA or someone who has personally gone toe to toe on this matter with the IRS would be greatly appreciated. Looking for a solid defense concerning this. Thanks Everyone!!

Peter Hoeck how did your friend come to find this 500k property for 150k? Agent, off market, marketing campaign?

Looking for a repair electrician. Purchased a new to me 6 family in Worcester Ma. The property was rewired within the past 15 years, modern wiring, breaker panels etc. There's some strange and unexpected things happening with one of the GFIs in one of the units and it affecting a common house GFI in the basement that is wired off a separate panel. Need a great recommendation for a local electrician that does smaller troubleshooting work. Thanks Everyone!

Looking for any investors out there with property in the Holyoke Ma area. I have been analyzing the returns in that area and see them as quite high relative to properties we have in the Worcester and southern nh areas. Anyone with success or horror stories in the area would be very helpful. Areas to avoid etc. Thanks everyone!!

Fitchburgh

For that kinda discount I'd have removed that back panel, beat it with a brick and enjoyed my sweat equity savings!! Looks like an easy fix. You may want to think about buying it again, maybe even at a deeper discount.

12% might be the goal but in Worcester and southern nh you can easily find 25% and I target 35% or greater, I'm only look at 6 units and up for that reason.  Quantities of units below that and the numbers get squeezed very very fast.  Just keep your eye out.  It is a little easier to get those numbers the higher in units you go considering economies of scale etc.

@rich 

@Rich N.

Haha, I just realized the same!  And ya made it with literally 2 minutes to spare but fryer was already down, damn it, but got the reset of the food!!  

It was awesome meeting you, great conversation!